Egypt gears up a new as net exporter of natural gas, says EIA

Posted on May 30, 2018

Egypt, the largest non-OPEC oil producer and the third-largest dry natural gas producer in Africa, is expected to flex its advantage as a net exporter of liquefied natural gas (LNG), according to EIA. The country got what it takes to be an arterial LNG supply: it serves as a major transit route for oil shipped from the Persian Gulf to Europe and to the US; as well, it plays a vital role in international energy markets through its operation of the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline.

Based on a recent report by the US Energy Information Administration (EIA), Egypt exported about 26 billion cu ft (bcf) of LNG, mostly to the Asia Pacific and the Middle East regions. In 2017, Egypt’s petroleum and other liquids production averaged 666,000 barrels per day (bpd). Most of the crude oil production in Egypt comes from the Western Desert and Gulf of Suez, and the remainder is produced in the Eastern Desert, Sinai, Mediterranean Sea, Nile Delta, and Upper Egypt.

Egypt became a net importer of natural gas in 2015 as a result of growing domestic demand and declining production levels.“Despite new discoveries, Egypt’s dry natural gas production declined by 31% from 2012 to 2016, leading to net imports since 2015,” according to the EIA report.

The EIA went on to say that to satisfy growing domestic demand, Egypt has had to divert its natural gas supply away from exports to the domestic market and to rely on LNG imports to address the shortfall in consumption.

The report explained that Egypt produced approximately 4bcf/day(d) of dry natural gas and imported 1.0 bcf/d in 2016. That year, Egypt’s LNG exports were estimated at 26 bcf, most which were sold to Asia (61%) and the Middle East (24%).

Meanwhile, EIA also reported that the Egyptian government has fast tracked the development of the Zohr and Atoll fields and the West Nile Delta (WND) project, pointing out that these fields are expected to make substantial additions to the overall supply, filling the gap between production and consumption.

The Zohr field was discovered in August 2015 and labelled as the largest offshore natural gas field in the Mediterranean. It has an estimated reserve of 30 trillion cu ft, and is currently producing0.4 bcf/d. Its natural gas production began in 2017 and is expected to produce 1 bcf/d after the first phase of the project is completed in 2018; peak production is estimated at 2.7 bcf/d and is expected to be reached by the end of 2019.